Formula 1 teams have agreed to a driver salary cap which is proposed to be $30m for both drivers combined. The cap would be introduced in 2023.
The $30m is not the final number, but it is the number being talked about. This means a team would have to split the number between their two drivers. However, if a team want to pay their drivers more, they are free to do so, but the difference would be deducted from the $145m budget cap that will be introduced in 2021.
However, if a team was to spend less on the drivers, this does not increase their overall budget. According to the proposal, drivers would still be free to earn additional income from personal sponsorships.
This proposal came after it was agreed that the budget cap would not include the salaries of drivers and the top three employees. There are talks that there could be a salary cap introduced for those employees in the future too.
The driver salary cap was backed by all team bosses during a meeting of the F1 Commission on Monday. The World Motor Sport Council still has to ratify the agreement after all the details have been hashed out.
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For now it is proposed that the driver salary cap would be introduced in 2023, but all of the contracts agreed upon prior to this new rule would still have to be honoured.
With Lewis Hamilton’s salary reported at around $40m (excluding endorsements) and Valtteri Bottas’ at around $8m, one or both drivers would have to agree on a significant pay cut if the salary cap is introduced. However if they were to sign a longer term deal by 2023, Mercedes would still be allowed to spend more than the $30m cap for the duration of those deals.
Earlier this year Mercedes team boss Toto Wolff said he was in favour of a driver salary cap, although he wanted it to be introduced a year later, so as to not “alienate” superstar drivers.
“The salary cap is something that we have supported,” said the Austrian.
“I believe similar to the leagues in the US, if you cap the team at $145m with a downward slope, you need at a certain stage to also cap high salaries.
“We have said we don’t want to lose the superstars out of this sport, so it needs to be a gradual introduction from 2024 onwards so that the future generations of drivers end up on a more sensible level, in considering that we have a cost cap on the team.
“This is still my opinion. I think it would be good for the sport. They need to be inspirational, the drivers, and as you can see in the US, the top football players and the top basketball players are still very inspirational.
“I think high salaries are what they deserve, because they are global superstars and they are the best of their league.
“I think it should not end up in a ratio, salary of an individual compared to the team cap, that over certain time is going to create controversy that is not needed,” concluded Wolff.